For most consumers, level term life insurance has been the best way to buy the most coverage for the least amount of money.
If the objective is to buy a life insurance plan to provide protection in case the policy purchaser/insured dies and they want the most consumer friendly type of insurance, then look no further than level term life insurance.
You get the biggest bang for your buck.
All top consumer advocates recommend level term life insurance.
Usually I can tell a client doesn't understand why they really need life insurance and how much life insurance they need, I get questions like, "I expect to live to 95 or 100 and the term plan will cease in 30 years when I'm 70.
" You have to breakdown the purpose first.
Are you buying it to protect yourself? Obviously no because if the policy pays the death benefit, you'll be dead.
You're buying it to protect your beneficiary.
If your beneficiary is a billionaire, then they may not need a $250,000 life insurance policy to pay them that sum if you died.
But if your beneficiary is your spouse who will be in a really bad financial situation if you die then that's a good start.
Lets say your spouse is not the breadwinner of the household and as hard as they tried, they couldn't make up the loss of income if you died.
And on top of that lets say that you have 4 children - ages 3, 10, 12 and 16.
Nobody plans on dying and I haven't met a client in the past 30 years that said they expect to die.
Lets toss out the idea that you're invincible.
If you were invincible then you wouldn't need any insurance but that's not the real world because stuff happens even if we don't expect it.
To care for this spouse with the four children, you would need to provide a large sum of money so it can be invested to provide monthly income and also provide college funds so the four kids can go to college.
The ideal way to calculate this is to do a detailed budget on what would be needed and then solve for the present value at assumed rates of return and monthly withdrawals.
A simple rule of thumb is to buy 10 times the insured's annual income.
So if you make $100,000 a year then a $1 million policy would be a good starting point.
But you're saying, a million dollar policy is too much.
My wife and kids wouldn't need that kind of money if I died.
And you're completely wrong.
If your spouse invested a million dollars in a conservative, the return may be 3%.
3% of a million is only $30,000.
They could draw from the principal but that will only deplete the funds quicker and may not provide needed funds down the road to pay for the kid's college expenses.
But a $1,000,000 life insurance plan is expensive.
And you would be wrong again.
If you bought a permanent, whole life or universal life insurance plan, it would be extremely expensive.
But if you bought a 20 or 30 year level term plan, the premiums would be surprisingly small and affordable.
But what happens after the 20 or 30 years and my insurance runs out.
That's not a problem because in that time, your kids will all be grown and the only need for life insurance may be to provide some residual income to your spouse.
And during that time if you were successful at investing and saving for retirement, you should be in a much better financial situation than you were in when you were younger with a family of four kids.
What's the easiest way to start? Call a licensed life insurance agent and ask for level term life insurance.